The positive market signals from last week flowed resolutely into this week's Australian wool auctions. Subsequent price gains were recorded across most wool types and descriptions. Competition across all Merino fleece wools was strong from the first lot of selling and only grew in intensity as the week progressed. General gains of 15 to 30ac/clean kg were made for the week. The crossbred and carding sectors largely held onto the established price quotations The highest price points for the week were seen at the close of the selling week. 

The top three exporter traders were key to this week's strong opening. New forward contracts were again written, allowing for disposal of any held wool, and creating forward book positions not seen for some time. Reports had the overseas users following the price upward as the spot prices improved locally. Chinese business dominated, with just smatterings of interest from other global destinations for Australian wool. 

The usual dispersal of wool through the first two months of each calendar year has largely been undertaken. The weekly auction volumes are forecast to be well under 40,000 bales for the foreseeable future Grower held wool in store is the only available source of any additions to the fresh shorn clips coming onto the sale show floors. Many of those held wools would most likely be offered only when substantial higher values are seen in the market.   

The make-up of the current selection has been more diverse than usual. Drought conditions continue across many of our wool growing regions which will see a continuation of the lowering of staple strength (nkt) , vegetable matter (vm) content and yields.  

The buyer's ability of further selling opportunities into an expected rapid decline in supply is rising. The wool auction markets largely rely upon a good dose of confidence through the entire supply chain. That semblance of confidence appears to be returning, with many of the overseas trade and mills reportedly having stemmed the losses of the past few years from old stocks and their books are now returning to balanced. Focus is now set upon new opportunities in wool and hopefully see a return to profitability in what is believed to be an improving global economy.

34,500 bales offered next week on Tues/Wed in all three centres.